Arkansas jobless rate dips

June’s 8% better than U.S. at 11%

Statewide unemployment dropped to 8% in June, with six job sectors adding workers while four posted declines, according to statistics released Friday.

The Arkansas Division of Workforce Services reported that the Arkansas jobless rate declined from 9.6% in May. Compared with June 2019, however, nonfarm payroll jobs in the state are down by 61,500.

Gov. Asa Hutchison called unemployment the “second crisis we’ve had in Arkansas” — on top of the pandemic — during his daily covid-19 update Friday.

The improvement in the unemployment rate does come with concerns, as the

labor force decreased by 33,219 in June. That is an indication that fewer workers are looking for jobs.

Nevertheless, economic development officials applauded the jobless rate improvement for the state.

“This is significantly below the national average, which is at 11.1%,” Hutchinson said.

Compared with May, leisure and hospitality gained 9,900 jobs; trade, transportation and utilities added 7,600 workers. Nonfarm payroll jobs in the state increased by 18,500 in June to a total of 1.2 million.

“The downward trend in Arkansas’ unemployment demonstrates that our economic recovery efforts are yielding positive results, but we still have work to do,” state

Commerce Secretary Mike Preston said in a statement.

“Despite the economic setbacks our state has experienced in recent months, the Arkansas economy is diverse and our workforce is second to none.”

The decrease in nonfarm payroll jobs compared with a year ago is attributed primarily to the pandemic. The state unemployment rate was 3.5% in February before the coronavirus wreaked havoc on the global economy.

Most job losses in June were recorded in government services, with educational services dropping 3,300 workers and health care falling by 800.

Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce, said the improvements from May to June are significant

“The latest unemployment rate reduction is really good news for our economy,” he said.

“We continue to receive encouraging employment information from businesses including many who are now at pre-covid levels of activity,” Chesshir said.

“These businesses represent a diverse mix of on-site and remote-work employment depending upon industry sector. Many companies are evolving to successfully navigate a prolonged disruption in their operations.”

The International Monetary Fund predicted Friday that the U.S. economy will shrink 6.6% this year, pounded by the coronavirus and the lockdowns meant to

contain it.

The grim forecast is actually an upgrade from one the IMF made last month, when it foresaw the American economy contracting 8% in 2020.

But the 189-country lending organization warned that the U.S. economy faces downside risks from a resurgence of covid-19 cases.

The economy virtually shut down in March and April as Americans stayed home and businesses shut down to keep the coronavirus from spreading. The national economy shrank at a 5% annual pace in the January-March quarter and is expected to have contracted a record 35% from April through June.

Employers cut a record 20.8 million jobs in April, but brought back 7.5 million workers in May and June as states began reopening for business.

Covid-19 cases started

rising again in early June, especially in the South and West, putting the economic recovery in jeopardy. “The recent increase in infection rates in some states is already leading to a slowdown or partial reversal of reopening decisions,” the IMF said in its annual assessment of the U.S. economy. (The IMF’s lower June forecast was part of a broader, global analysis.)

The IMF now expects the U.S. economy to rebound to 3.9% growth next year. But the unemployment rate will remain elevated, the IMF said, averaging 7.4% the last three months of 2021. In February, before the pandemic spread rapidly in the United States, unemployment was near historic lows at 3.5%.

The unemployment rate in Arkansas in June last year was 3.6%.